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Construction

Published: August 2018

India


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  • 1.

    Foreign pursuit of the local market
    If a foreign designer or contractor wanted to set up an operation to pursue the local market, what are the key concerns they should consider before taking such a step?

  • 2.

    Licensing procedures
    Must foreign designers and contractors be licensed locally to work and, if so, what are the consequences of working without a licence?

  • 3.

    Competition
    Do local laws provide any advantage to domestic contractors in competition with foreign contractors?

  • 4.

    Competition protections
    What legal protections exist to ensure fair and open competition to secure contracts with public entities, and to prevent bid rigging or other anticompetitive behaviour?

  • 5.

    Bribery
    If a contractor has illegally obtained the award of a contract, for example by bribery, will the contract be enforceable? Are bribe-givers and bribe-takers prosecuted and, if so, what are the penalties they face? Are facilitation payments allowable under local law?

  • 6.

    Reporting bribery
    Under local law, must employees of the project team members report suspicion or knowledge of bribery of government employees and, if so, what are the penalties for failure to report?

  • 7.

    Political contributions
    Is the making of political contributions part of doing business? If so, are there laws that restrict the ability of contractors or design professionals to work for public agencies because of their financial support for political candidates or parties?

  • 8.

    Compliance
    Is a construction manager or other construction professional acting as a public entity’s representative or agent on a project (and its employees) subject to the same anti-corruption and compliance as government employees?

  • 9.

    Other international legal considerations
    Are there any other important legal issues that may present obstacles to a foreign contractor attempting to do business in your jurisdiction?

  • 10.

    Construction contracts
    What standard contract forms are used for construction and design? Must the language of the contract be the local language? Are there restrictions on choice of law and the venue for dispute resolution?

  • 11.

    Payment methods
    How are contractors, subcontractors, vendors and workers typically paid and is there a standard frequency for payments?

  • 12.

    Contractual matrix of international projects
    What is the typical contractual matrix for a major project in your jurisdiction in terms of the contractual relationships among the various construction project participants?

  • 13.

    PPP and PFI
    Is there a formal statutory and regulatory framework for PPP and PFI contracts?

  • 14.

    Joint ventures
    Are all members of consortia jointly liable for the entire project or may they allocate liability and responsibility among them?

  • 15.

    Tort claims and indemnity
    Do local laws permit a contracting party to be indemnified against all acts, errors and omissions arising from the work of the other party, even when the first party is negligent?

  • 16.

    Liability to third parties
    Where a contractor constructs a building that will be sold or leased to a third party, does the contractor bear any potential responsibility to the third party? May the third party pursue a claim against the contractor despite the lack of contractual privity?

  • 17.

    Insurance
    To what extent do available insurance products afford a contractor coverage for: damage to the property of third parties; injury to workers or third parties; delay damages; and damages due to environmental hazards? Does the local law limit contractors’ liability for damages?

  • 18.

    Labour requirements
    Are there any laws requiring a minimum amount of local labour to be employed on a particular construction project?

  • 19.

    Local labour law
    If a contractor directly hires local labour (at any level) for a project, are there any legal obligations towards the employees that cannot be terminated upon completion of the employment?

  • 20.

    Labour and human rights
    What laws apply to the treatment of foreign construction workers and what rights do they have? What are the local law consequences for failure to follow those laws?

  • 21.

    Close of operations
    If a foreign contractor that has been legally operating decides to close its operations, what are the legal obstacles to closing up and leaving?

  • 22.

    Payment rights
    How may a contractor secure the right to payment of its costs and fees from an owner? May the contractor place liens on the property?

  • 23.

    ‘Pay if paid’ and ‘pay when paid’
    Does local law prohibit construction contracts from containing terms that make a subcontractor’s right to payment contingent on the general contractor’s receipt of payment from the owner, thereby causing the subcontractor to bear the risk of the owner’s non-payment or late payment?

  • 24.

    Contracting with government entities
    Can a government agency assert sovereign immunity as a defence to a contractor’s claim for payment?

  • 25.

    Statutory payment protection
    Where major projects have been interrupted or cancelled, do the local laws provide any protection for unpaid contractors who have performed work?

  • 26.

    Force majeure and acts of God
    Under local law, are contractors excused from performing contractual obligations owing to events beyond their control?

  • 27.

    Courts and tribunals
    Are there any specialised tribunals that are dedicated to resolving construction disputes?

  • 28.

    Dispute review boards
    Are dispute review boards (DRBs) used? Are their decisions treated as mandatory, advisory, final or interim?

  • 29.

    Mediation
    Has the practice of voluntary participation in professionally organised mediation gained acceptance and, if so, how prevalent is the practice and where do the mediators come from? If not, why not?

  • 30.

    Confidentiality in mediation
    Are statements made in mediation confidential?

  • 31.

    Arbitration of private disputes
    What is the prevailing attitude towards arbitration of construction disputes? Is it preferred over litigation in the local courts?

  • 32.

    Governing law and arbitration providers
    If a foreign contractor wanted to pursue work and insisted by contract upon international arbitration as the dispute resolution mechanism, which of the customary international arbitration providers is preferred and why?

  • 33.

    Dispute resolution with government entities
    May government agencies participate in private arbitration and be bound by the arbitrators’ award?

  • 34.

    Arbitral award
    Is there any basis upon which an arbitral award issued by a foreign or international tribunal may be rejected by your local courts?

  • 35.

    Limitation periods
    Are there any statutory limitation periods within which lawsuits must be commenced for construction work or design services, and are there any statutory preconditions for commencing or maintaining such proceedings?

  • 36.

    International environmental law
    Is your jurisdiction party to the Stockholm Declaration of 1972? What are the local laws that provide for preservation of the environment and wildlife while advancing infrastructure and building projects?

  • 37.

    Local environmental responsibility
    What duties and liability do local laws impose on developers and contractors for the creation of environmental hazards or violation of local environmental laws and regulations?

  • 38.

    International treaties
    Is your jurisdiction a signatory to any investment agreements for the protection of investments of a foreign entity in construction and infrastructure projects? If so, how does your model agreement define ‘investment’?

  • 39.

    Tax treaties
    Has your jurisdiction entered into double taxation treaties pursuant to which a contractor is prevented from being taxed in various jurisdictions?

  • 40.

    Currency controls
    Are there currency controls that make it difficult or impossible to change operating funds or profits from one currency to another?

  • 41.

    Removal of revenues, profits and investment
    Are there any controls or laws that restrict removal of revenues, profits or investments from your jurisdiction?

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Advaya Legal (www.advayalegal.com) is a full-service commercial law firm headquartered in Mumbai. Being a full-service law firm, Advaya provides a host of services including corporate, commercial and transactional law, aviation law, M&A, technology law, intellectual property, employment, dispute resolution and real estate.

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